Date
18 January 2017
Sumner Redstone has signaled his intention to take control of the future of his US$40 billion media empire. Photo: CNN
Sumner Redstone has signaled his intention to take control of the future of his US$40 billion media empire. Photo: CNN

Redstone fires Viacom directors, tightens fight for future

Sumner Redstone has ousted five Viacom Inc. directors, including chief executive Philippe Dauman, raising the stakes in the battle over the future of his US$40 billion empire.

Dauman remains chief executive. He and the board will stay in place until a court affirms the changes, Reuters reports.

Redstone’s move could be a prelude to the 93-year-old media mogul forcing Dauman out of the company entirely.

The company’s shares closed up 6.7 percent after the announcement. Shares of CBS Corp., also majority-owned by Redstone, closed up 2.4 percent.

Redstone’s privately held movie holding company, National Amusements, which owns 80 percent of voting shares of Viacom and CBS, filed with a Delaware Court to approve that the changes are legal.

National Amusements said it removed Dauman, George Abrams, lead independent director Fred Salerno, William Schwartz and Blythe McGarvie.

It said it replaced the directors with Kenneth Lerer, a venture capitalist and co-founder of the Huffington Post and chairman of BuzzFeed; Nicole Seligman, a former Sony Corp executive, Judith McHale, the former head of Discovery Communications who was general counsel for MTV Networks; Thomas May, the chairman of Eversource Energy utility company and Ron Nelson, chairman and chief executive of Avis Budget Group who used to work at DreamWorks and Paramount.

Redstone said on May 27 that he was considering removing Dauman and the board, citing dissatisfaction with the struggling company’s strategy that includes a sale of a minority stake in Paramount Pictures.

At that time, Viacom’s independent directors characterized such a move as “legally flawed” and said they would contest their ouster.

National Amusements also filed papers in a Delaware Court asking it to prohibit the Viacom board from “taking any action outside of the ordinary course of business,” the company said.

Viacom’s six other directors, which include Viacom chief operating officer Thomas Dooley, remain on the board.

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